Risk Update

There Will be Conflicts — Oil & Gas Clashes Over Alleged Attorney Conflicts

Decision of the Day: Court Declines to Disqualify Defendant’s Counsel, No Conflict of Interest Exists” —

  • “In the underlying action, plaintiff contended that Somerset Production Co. LLC amended its operating agreement to add a company half owned by defendant called Berea Oil and Gas Corp., which effectively allowed defendant to dominate Somerset.”
  • “Plaintiff contended that defendant diverted Somerset’s funds for his own personal use. Defendant’s counsel Barclay Damon represented Somerset in 2015 during the time of defendant’s alleged misappropriation of Somerset’s funds.”
  • “Plaintiff therefore asserted that Barclay provided legal services to both defendant and Somerset in connection with several transactions that go to the heart of plaintiff’s allegations and must be disqualified since an there is an obvious conflict of interest.”
  • “The court noted, among other things, that plaintiff alleged that defendant overcharged Somerset for the use of a drilling permit and did not allow Somerset to enjoy the benefits of that permit, adding that whether Barclay was counsel when the well was first purchased in n 1987 is irrelevant to these allegations and do not present a conflict.”

EQT Can’t Nix Its Former Atty From Abandoned Gas Well Suit” —

  • “EQT Corp. has failed to block its former attorney and an ex-employee from representing plaintiffs in a proposed class action over ‘abandoned’ natural gas wells, with a federal judge determining the bids looked like attempts ‘to foreclose an employee that they terminated from securing any meaningful employment’ in the industry.”
  • “On Wednesday, U.S. District Judge John Preston Bailey dismissed EQT’s attempts to disqualify its previous legal counsel Brian Swiger and former employee Bryant ‘Wayne’ Bowman II from representing landowners who sued the company on the grounds it depleted land values and created health hazards by abandoning 12,000 natural gas wells in Appalachia.”
  • “EQT accused Swiger, now an attorney for Bailey and Glasser LLP, and Bowman, a non-lawyer member of the plaintiffs’ legal team, of using insider information to aid the case against it and co-defendant Diversified Energy Co. PLC, but Judge Bailey wrote in his back-to-back Feb. 22 orders that EQT’s arguments were ‘unavailing.'”
  • “In response to the requested disqualification of Swiger, Judge Bailey wrote that EQT was not able to provide examples that he worked on cases that would have provided him insider information pertinent to the current proposed class action.”
  • “As for the requested disqualification of Bowman, a 22-year employee of EQT, Judge Bailey wrote that, ‘Inasmuch as Mr. Bowman is not an attorney, it would appear that his duty to preserve confidential information is governed by contract… this court finds no ethical violation on the part of Mr. Bowman or the plaintiffs’ law firms.'”
  • “A proposed class of West Virginia property owners led by Mark McEvoy and James and Susan Tawney filed their complaint against Diversified Energy Co. PLC and EQT in July 2022, accusing Diversified of leaving them with “unplugged, inoperative and abandoned wells” that posed hazards to their health and lowered the value of nearby properties.”